The Federal Reserve has already cut US interest rates by 50 basis points at the September FOMC meeting. Before the ink was dry on the announcement, the market was predicting another rate cut at the Fed’s November meeting. Risk assets are likely to be the biggest beneficiaries of this move, and altcoins are anticipating a rally.

Another big rate cut coming?

There is a 60.8% chance that the Fed will cut rates by another 50 basis points, to be announced at the next Fed meeting on November 7. The probability of a 25 basis point cut is now just 37.2%.

The forecast has markets anticipating a rapid and aggressive rate cut from the Federal Reserve. The Fed itself expects a total of 125 basis points of rate cuts by the end of the year, which would leave room for a final 25 basis point cut in December if that happens.

Of course, it’s not just the Fed that’s cutting rates. All the developed world’s central banks are cutting rates, and most are signaling further easing.

In this environment, risk assets are most likely to be the fastest investors. Moving along the risk curve, Bitcoin (BTC/USD) is definitely the beneficiary, and then, more risky, are other cryptocurrencies. With such a small market cap, some of them have the potential to significantly outperform the market.

Total3 stands out

Total3 is a chart showing recent trends in altcoins. This is the total market cap of all cryptocurrencies except $BTC and $ETH.

It can be seen that the altcoin market cap has been in a bull flag formation since the first quarter of this year, just like $BTC. The chart shows a breakout and retest, and the total market cap may be about to make a higher high.

Nonetheless, the price has reached horizontal resistance, also delineated by the 0.5 Fibonacci line. There is a chance of rejection from here, but with a bull flag having just been broken out and the Stochastic RSI momentum indicator on the weekly timeframe sending a bullish upside momentum signal, there is a greater chance that the price will continue to rise.

Solana ($SOL) Leads

Solana (SOL/USD) is one of the major altcoins that has taken advantage of the increased liquidity. Up nearly 5% on the day, $SOL is a major layer 1 competitor to Ethereum. $SOL price broke above the descending trendline on Sept. 19 and has been climbing steadily since then.

$SOL price has now broken above the 0.5 Fibonacci resistance level at $152. If successful, the next targets would be $162 and $176 as shown in the chart.

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